Realizao Parceiros Apoio BUSINESS OPPORTUNITIES IN TURKEYS PPP - - PowerPoint PPT Presentation

Realização Parceiros Apoio

BUSINESS OPPORTUNITIES IN TURKEY’S PPP MARKET

Emre AYKAR

President – CICA (Confederation of International Contractors’ Association), Vice President – TCA (Turkish Contractors’ Association) Partner, Member of the Board – Yapı Merkezi

April 28th, 2015 – BRASILIA

CONTENTS

1. Presentation of Eurasia Tunnel Project 2. Ongoing Major PPP Projects in Turkey 3. Some Major Future PPP Projects in Turkey

• 1. Presentation of Eurasia Tunnel Project

EURASIA TUNNEL – Cross Section

PROJECT OVERVIEW - Location

PROJECT OVERVIEW – Contribution to Istanbul’s Highway Network

• Providing continuous

flow of traffic between Asian and European Side of Istanbul in a safe, robust and comfortable fashion.

• Significant time savings
• Shortest path between

Atatürk and Sabiha Gökçen airports

• No effect on the

“Silhouette of Istanbul”

• Net savings in pollutant

emissions with reduced travel time – An Environmental Friendly Project

PROJECT OVERVIEW – Key Stakeholders

PROJECT OVERVIEW – Dates

Contract Signed: February 2011 Loan Agreements: December 2012 Start of Service: October 2016 (estimated) Transfer (back to the Client): January 2042 Total Duration of the Concession: 29 Years 10 Months

PROJECT SPONSORS – Yapi Merkezi

Dubai Metro Haramain High Speed Railway Madinah station

PROJECT SPONSORS – Yapi Merkezi

Ethiopia Awash – Kombolcha – Hara Gebaya R. Four Seasons Hotel Ankara Konya High Speed Railway

PROJECT SPONSORS – Yapi Merkezi

Algeria Bir Touta – Zeralda Railway Izmir Metro Casablanca Tramway

PROJECT SPONSORS – SK E&C

 SK E&C has achieved success with its development of the newest building methods, creation of advanced systems, and its extensive experience and know-how.

BORED TUNNEL (TBM) – Geological Conditions

• Strait was formed by historic tectonic forces, leaving the Trakya Sandstone bedrock fold-

ed, faulted, intruded, intensely fractured and weathered.

• Soft ground consisits of alluvial deposits that have in-filled a past channel in the bedrock.

Alluvial deposits range from coarse-grained soils to fine-grained soils and can vary both vertically and laterally as a result of depositional history.TBM tunnel passes through mostly silty fine sand and some clay and sandy clay layers.

BORED TUNNEL (TBM) – Bored Tunnel Section

Upper Roadway Deck (Cast in Situ) Lower Roadway Deck (Precast) Upper Corbel Lower Corbel Utility Gallery Precast Segment Lining(t=600mm) 12.000 600 600 13.200

BORED TUNNEL (TBM) – Assembly of the Tunnel Boring Machine

BORED TUNNEL (TBM) – Excavation Pit (Asian Side)

BORED TUNNEL (TBM) – Internal View of the Tunnel

BORED TUNNEL (TBM) – Segment Stock and Delivering

BORED TUNNEL (TBM) – Upper-Deck Construction

BORED TUNNEL (TBM) – Upper-Deck Construction

BORED TUNNEL (TBM) – Upper-Deck Construction

FINANCIAL STRUCTURE – Summary Investment

Item Cost (USD) EPC Costs: 814,000,000 Development and Admin: 115,000,000 Financial Costs: 81,000,000 Interest During Investment: 178,000,000 Reserves and Contingency: 57,000,000 TOTAL INVESTMENT COST 1,245,000,000 Equity (22.9%) 285,000,000 Senior Loans (77.1%) 960,000,000

FINANCIAL STRUCTURE – Financial Institutions and Credits  Multilateral Institutions:

 European Investment Bank  European Bank for Reconstruction and Development

 Export Insurance Providers:

 Korean Exim Bank  Korean Export Insurance Agency (K-Sure)

 Commercial Banks:

 Standard Chartered Bank  Sumitomo Mitsui Banking Corporation  Mizuho Bank  Garanti Bankası  Türkiye İş Bankası  Yapı Kredi Bankası  Deutsche Bank

Type of Facility Amount Extended (USD)

All facilities’ terms are 18 years Direct Facilities: 550,000,000 Facilities under Export Insurances: 210,000,000 Facilities Guaranteed by Turkish Banks: 200,000,000

Total Credits: 960,000,000

FINANCIAL STRUCTURE – Development and Legal Framework  Development and updating of City Plans

 Approvals from Protection Councils and other authorities  Creation of City Plans  Updating of Existing City Plans by Municipalities

 Development of Debt Assumption Agreement

(between Lenders and Turkish Treasury)

 Development of Direct Agreement

(between Lenders and Ministry of Transportation)

 Development of Cooperation Protocol

(between Ministry of Transportation, Istanbul Metropolitan Municipality, Turkish National Police and Turkish Highway Authority)

FINANCIAL STRUCTURE – International Project Financing Awards

26

 Euromoney – Europe’s Best Project Finance Deal  EMEAFinance – Best PPP Project Deal  Infrastructure Journal – Best Innovative Deal  Thomson Reuters PFI – Best Infrastructure Deal

• 2. Ongoing Major PPP Projects in Turkey

 The 3rd Bosphorus Bridge and the Northern Marmara Motorway Project  Istanbul 3rd Airport  Gebze-Orhangazi-İzmir Motorway Project (Incl. Izmit Bay Crossing and Approach Roads)  Bilkent Integrated Health Campus Project

THE 3rd BOSPHORUS BRIDGE

• Client: General Directorate of Highways
• Investors: IC İçtaş – Astaldi Consortium
• Scope: Construction of the 3rd Bosphorus Bridge (1,408m) and 115km motorway. The

bridge will have 8 lanes of motorway and 2 lanes of railway at the same level

THE 3rd BOSPHORUS BRIDGE

• Total Investment Cost: USD 2,5bln
• Construction Period: 3 Years
• Operation Period: 7 Years and 2 Months
• Notes:
• State-backed Minimum Revenue

Guarantee

• Freight Transportation (Rail + Road)

will be diverted out of the city limits

• This will be the longest spanning

suspension bridge in the world that has a rail system on it

• Client: Ministry of Transport, Maritime and Communications
• Investors: Cengiz-Kolin-Limak-MAPA-Kalyon Consortium
• Scope: Project total area of 76,500,000m2 (6 runways, 6 taxiways, high-speed and

connection taxiways, Air traffic, Communications and Meteorology Systems, other service buildings and systems)

ISTANBUL 3rd AIRPORT

ISTANBUL 3rd AIRPORT

• Total Investment Cost: EUR 9 bln
• Contract Value: EUR 22 bln (excl. VAT)
• Construction Period: 5 Years
• Operation Period: 25 Years
• Notes:

– The whole project is to be completed in several phases – At completion the airport’s capacity will be sufficient to service 150,000,000 passengers per year – Istanbul is to become a regional and international hub for air passenger traffic – PPP structure is based on many succesfully completed airport concessions in Turkey’s past.

GEBZE – ORHANGAZI – IZMIR HIGHWAY

• Client: General Directorate of Highways
• Investors: Nurol-Özaltın-Makyol-Astaldi-

Göçay Joint Venture

• Scope: The project has total 427km

length consisting of 384km motorway and 43km connection roads; Including a suspension bridge (İzmit Bay Crossing Bridge) of about 2,6km in length

GEBZE – ORHANGAZI – IZMIR HIGHWAY

• Total Investment Cost: EUR 10bln
• Construction Period: 7 Years
• Operation Period: 15 Years 4 Months
• Notes:

– The project will reduce travel time from Istanbul to İzmir, two of the main economic centers in Turkey, from 10 hours to 4 hours – The area across which the project stretches has one third of Turkey’s population and includes the seven most industrialized cities contributing to 45% of GDP

BILKENT INTEGRATED HEALTH CAMPUS

• Client: General Directorate of Health Investments
• Investors: IC İçtaş – Dia Holding fzco Joint Venture
• Scope: To design, build, finance, operate and transfer a hospital with a capacity of

3,804 beds. The total area is approx. 1,2M sqm. The project company will provide the facilities management services and other clinical and non-clinical support services over the course of the operating period.

BILKENT INTEGRATED HEALTH CAMPUS

• Total Investment Cost: USD 850M
• Construction Period: 42 Months
• Operation Period: 25 Years
• Notes:

– Renumeration in availability payments – Strong support from Multilateral Banks and International Finance Institutions

Project in Operation Project in Financial Close/Construction Total

Project Number 153 30 183 Project Value USD 40 bln USD 62 bln USD 102 bln

Some of the Main PPP Types Qty. Sectors Involved Build-Operate-Transfer 98 Energy, Airports, Ports Transfer of Operating Rights 69 Energy (HEPP), Highways, Bridges, Ports Build-Lease-Transfer 11 Healthcare Other 5 Various

73 Energy 29 Highways 21 Ports 18 Airports 15 Marinas 11 Healthcare

Projects Project Value Energy USD 21.5 bln Airports USD 56.6 bln Motorways USD 11.5 bln Harbor USD 2.0 bln Marina USD 1.6 bln Healthcare Facilities USD 6.8 bln Industrial Facilities USD 1.3 bln Bordergate USD 0.4 bln Railway USD 0.2 bln Total USD 102 bln

Implementation in Important Sectors:

• 3. SOME MAJOR FUTURE PPP PROJECTS IN TURKEY

 ISTANBUL GRAND TUNNEL BOT PROJECT  KINALI – CANAKKALE HIGHWAY INCL. DARDANELLES STRAIT CROSSING BRIDGE  ISTANBUL – ANKARA SUPER HIGH-SPEED RAILWAY

ISTANBUL GRAND TUNNEL BOT PROJECT

• 6,5km tunnel passing under Bosphorus

with 2 highways and 1 metro line levels

• Approximate length of the tunnel with the

three levels: 6,5km

• Diameter: 18,80m
• The deepest point below water: -110 m
• Total Investment Cost (approx): USD 6 bln

KINALI – CANAKKALE HIGHWAY AND DARDANELLE STRAIT BRIDGE

• 322km Highway from İstanbul to Çanakkale

including 3,6km bridge between Gelibolu – Lapseki

• 2x3 highway lanes + railway
• The bridge will divert the traffic between

Balkans and Anatolia out of Istanbul, shortening travel times and decreasing costs

• EPC Cost (approx): USD 4,5 bln /

Investment (rough estimate) : USD 6bln

ANKARA – ISTANBUL SUPER HIGH-SPEED TRAIN

• Track Length: 350 km
• The travel time will be decreased from 5

hours to just 1 hour 15 minutes

• Max. Design Speed: 400 km/hr
• Investment (estimate): USD 7 bln

HOW ARE PPP’s USED IN TURKEY

• PPPs have been mainly used to attract

local and international investors to participate in solving infrastructure needs

• f the country in addition to the classical

method of government budget funding.

• In Turkey the main PPP subsectors

heavily utilized have been; energy production and distribution, motorways, airports, ports, waste and wastewater treatment and hospitals.

HOW ARE PPP’s USED IN TURKEY

• The government has played a key role by supporting the bankability of the projects with

strong administrative, legislative and financial support. This continuous support has persuaded the investors to enter the PPP market.

• The government has also followed best practices and good advices from international

advisors; such as; Minimum Revenue Guarantees, Step-in Mechanism, Debt assumption Agreements, International Arbitration, etc.

HOW ARE PPP’s USED IN TURKEY

• The PPP projects which are in operation

phase are mainly in energy, airports and

• ports. In this sectors there has been a

substantial improvement in the quality of the services. In some of these service sectors such as airports Turkey has even created globally active and recognized brand names such as TAV.

FINAL REMARKS

• As of today, several local and international investors have committed to 183 projects under

various PPP schemes in Turkey

• The total investment amount for these projects, either in operation or have been

succesfully awarded to investors, is more than $ 100 bln.

• There are many big PPP projects planned which are in Turkey's «2023 Goals». This future

pipeline of PPP investments are mainly in airports, highways, railways, education facilities, hospitals and waste/ waste water treatment facilities.

• The know-how gained through the previously completed PPP investments have

contributed to the current solid legal, administrative and financial framework for PPP implementation in Turkey, through which the current great progress has been and the future bigger steps will be achieved.

FINAL REMARKS

As Turkish Contractors, we are ready to cooperate on PPP Projects with our

Brazilian Colleagues in Turkey, Brazil and the rest of the World!

FINAL REMARKS

THANK YOU FOR YOUR KIND ATTENTION

Emre Aykar emre.aykar@ym.com.tr